Iraqi grain output 'could double'

That might not be as much of a feat as would seem at first glance, said Daniel Amstutz, U.S. senior ministry advisor for agriculture in Iraq, speaking from Kuwait during a press conference at USDA headquarters in Washington.

“They were producing that much grain prior to the Gulf War and with the rehabilitation of their irrigation system and dealing with animal health problems, I’m really optimistic that we can see the building of good animal agriculture industries, and perhaps a resurgence in palm oil production.”

Even so, said Amstutz, a former undersecretary of agriculture for farm and foreign agricultural services, Iraq will continue to need to import 60 percent of its food from the outside for some time.

“It’s likely that Iraq will continue to be an importer, but it is also possible that they will produce more of their food needs indigenously, and that they'll have a far more prosperous agriculture than has been the case during the Saddam Hussein regime,” he said. (Latest estimates put Iraq’s 2003 grain production at 900,000 metric tons.)

“I didn't say that they would become self-sufficient, but I thought they could produce more of their needs. I think this can happen relatively quickly. The planning part of this and the development of the inputs that will be provided as desired, that can happen quite quickly.”

While U.S. residents are accustomed to seeing pictures of the Iraqi desert, not all of the country is a vast wasteland, Amstutz said.

“The dryland area, the wheat area in the north of Iraq is somewhat similar to our Great Plains,” he said, “but the central and southern irrigated areas are really somewhat similar to the Central Valley of California.

“Culturally and historically, this is a rich agricultural area. Iraqis were irrigating their crops in the Tigris/Euphrates River Valley before the Greeks and the Romans, thousands of years ago. So by thinking of those comparisons, you see that there can be richness in agricultural production in this country.”

One of the first steps to getting Iraqi agriculture back on its feet will be restoring portions of the country’s infrastructure so that farmers can begin harvesting grain crops in mid-May and planting rice in the irrigated areas of the South.

Food aid distributions, which are being managed by the U.N. World Food Program have begun and efforts are underway to get the oil flowing and the resumption of power generation.

“Obviously, all those things are important and they’re interrelated,” said Amstutz. “We need the oil, the fuel, the turbines to generate the power, and we need power to mill the wheat into flour and to pump the water in the irrigation areas.”

Another key ingredient, he said, will be the removal of all of the United Nations sanctions that were imposed on Iraq following the Gulf War so that American companies “will have the freedom to do business there.”

A stickier question concerns Iraq’s creditworthiness, said J.B. Penn, the current undersecretary for farm and foreign agricultural services.

“The fact is that Iraq has not serviced its external debt for about 15 years, and there are questions about the total size of that debt,” said Penn, who sat in on the conference with Amstutz.

“Some estimates suggest it might be more than $100 billion, excluding claims for reparations connected with the Kuwait Gulf War. Now, we do know that CCC has paid over $2 billion in claims resulting from Iraq's default on commercial credits and credit guarantees in the early 1990s.”

To become eligible for new credits, he said, Iraq will have to become current on its existing debt obligations. “There are a number of ways to do that, but the IMF and the Paris Club would be crucial to that process,” said Penn. “And Iraq must complete that process and then have sufficiently high credit rating that would allow CCC to provide guarantees again for commercial exports.

“We expect that the U.S. government's review of the Iraq credit situation will be ongoing, and the Treasury Department will have a lead role in carrying that out for the government,” said Penn. “So we have to just wait and see how that process plays out before we can talk about when Iraq might be eligible for the Export Credit Guarantee Programs again.”

While those complications are being worked out, Amstutz said he and other USDA representatives are hopeful that they can find Iraqis they can work with to bring agricultural production back to pre-Gulf War levels.

“My hope is that we'll see all sectors of the Iraq economy start growing and expanding as we see a realization of this transition to a market-driven economy, and that Iraq will be able to buy what import needs it has commercially, without the need for food aid,” he noted.